Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,000. Which of the following statements is correct regarding the sale of the house?
a. The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000.
b. The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP.
c. The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP.
d. The 2006 sale affected neither 2005 GDP nor 2006 GDP.
Answers: 1
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Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000...
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